The New “Unlimited” Data Plans

Category: Mobile

Language evolves over time. One of my friends likes to illustrate this point by startling people with, “I used to be gay, but when a certain segment of society took a shine to that word I became joyful to avoid confusion.” But what cellular service providers are doing to the word “unlimited” isn’t evolution; it’s mutation in the B-grade monster movie tradition. Read on for the scoop on so-called unlimited data plans...

Understanding the Limits on Unlimited Data

Long ago, all of the major carriers had unlimited talk, text, and data plans that were simple and straightforward. You could talk, text, and use the Internet as much as you wished and as fast as possible for one flat fee per month. Today, that’s still true of talk and text. But “unlimited data” has become a lot more complicated.

You can still use as much data as fast as you wish, but it will cost you dearly - more than $10 per gigabyte on AT&T if you exceed the allowance of data included with your base monthly fee. The other carriers have similar penalties for using too much unlimited data. But customers get very upset if their monthly bill is several times larger than expected, so now carriers are limiting the quality of the experience you get, hoping you won’t notice any difference worth complaining about.

T-mobile recently announced its 12th “un-carrier” initiative, dubbed T-mobile ONE. That means one price ($40/month per line) and one speed (4G LTE) for all the data you wish. No more guessing how many bytes per month you’ll use. No more budget-busting overage charges. No more throttling down to 2G speed (100 to 300 Kbps) when you exceed an arbitrary number of bytes. You can also roll over your unused data to the next month, to use for 12 months, up to a max of 20GB. Sounds great, right?

Limits on Unlimited Data

But tethering your computer to your mobile phone’s data connection is limited to 2G speed unless you pay an additional $15 per month for every 5GB of data used via tethering. Streaming video from all sources is “optimized” down to standard definitiion - 480p - unless you pay an extra $25 per month. The roughly 3% of T-mobile customers who use more than 26GB of data per month will find their speeds throttled to 2G for the rest of the billing cycle.

I don’t know whether most users can tell the difference between 480p and 1080p video on a smartphone’s tiny screen. Unless you’re one of the data hogs who runs a server on a mobile data connection, the 26GB threshold probably won’t affect you. But T-mobile’s “unlimited” data plan is limited, no matter what the company says.

Sprint, AT&T and Verizon Data Plans

Sprint’s Unlimited Freedom plan costs $60 per month per line ($100 total for two lines). Streaming video is in standard definition and there’s no option to buy HD quality. Streaming music maxes out at “extreme quality,” or 500 Kbps. Online gaming is limited to 2Mbps. Sprint does not offer rollover data, so use it or lose it.

AT&T’s Mobile Share Advantage plan keeps monthly data allowances but has eliminated overage charges. Instead, customers who exceed their monthly data allowances will be throttled down to 128 Kbps, a speed that was state-of-the-art back in 2002. Multiple tiers of data allowances range from 1 to 30 GB and cost $30 to $135 per month, plus $10-$40 per line access fees. Unused data can be rolled over, but it must be used in the next billing cycle. Business customers have even more confusion - er, choices.

Verizon, with its usual disdain for competition, doesn’t offer any “unlimited” data plans. (The company stopped offering unlimited data in 2011, so only those customers who were grandfathered in, and have not switched plans since then retain that benefit.) Verizon has five data plans (S-2GB, M-4GB, L-8GB, XL-16GB and XXL-24GB) ranging from $35/month to $110/month. Unused data can be rolled over, but it must be used in the next billing cycle. The S, M and L plans have an optional "Safety Mode" which costs an extra $5/month, and lets you go beyond your data allotment without any penalty fees. But speeds are limited to 128 Kbps while in Safety Mode. There Safety Mode feature is included with the XL and XXL plans at no extra charge, but your data speeds are still throttled.

The Federal Communications Commission is watching “unlimited” data plans closely, but has not yet ruled whether any of them violate its Open Internet rules that prohibit blocking, throttling, and engaging in paid prioritization of traffic. The relevant rule reads, “A person engaged in the provision of broadband internet access service, insofar as such person is so engaged, shall not impair or degrade lawful internet traffic on the basis of internet content, application, or service, or use of a non-harmful device, subject to reasonable network management.”

Keeping Them Honest

“Reasonable network management” is what justifies the limits placed on “unlimited” service in the minds of the carriers. Sprint explicitly states that its “data deprioritization” (throttling) will only be “applied during (network) congestion.” Congestion is usually localized; one cellular tower may be temporarily overloaded, and throttling the one or two data hogs using it may relieve congestion for all of its users. But temporary congestion does not justify throttling a user for the rest of his/her billing cycle, as all of these plans do.

T-mobile has been dishonest about “optimizing” video, according to research conducted by the Electronic Frontier Foundation. The carrier isn’t really compressing 1080p video to 480p, the EFF’s researchers discovered last year. Instead, T-mobile throttles HD video streams down to 1.5 Mbps, forcing the streaming service to downshift its feed to 480p.

T-mobile CEO John Legere denied the EFF’s throttling charge and, in his typically polite manner, asked on Twitter, "Who the f*** are you, anyway, EFF? Why are you stirring up so much trouble, and who pays you?" But when the EFF asked directly, “Does (T-mobile) alter the video stream in any way, or just limit its bandwidth?” the company’s spokespeople were forced to admit to throttling.

This sort of disingenuous shenanigans is exactly what the FCC’s Open Internet rules are intended to prevent. We can thank the EFF for keeping a close eye on carriers, and keep the pressure on the FCC to enforce its rules.

Your thoughts on this topic are welcome. Post your comment or question below...

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Most recent comments on "The New “Unlimited” Data Plans"

Posted by:

Andrew Rein
25 Aug 2016

I think your price for the T-mobile new plan is misleading and should be restated. It is "$40 a line for a family of four" but $70 for the first line. Not so cheap if you just need one line.

Posted by:

Sarah L
25 Aug 2016

This is just like the Straight Talk unlimited in the USA plan we are using. The phone was a true bargain, but in the third month we learned what happens at 2G and it is not pretty. We have to send a text to ask what usage is, by a return text. We got the phone for calls, but slowly all those features on the $20 touch screen phone were discovered, along with you tube songs. That last week was painful. No way to pay extra with their arrangement. But they have a more expensive plan for more data, of course. It is a good company with good service, I am not complaining about that. This was the first time I really understood what data means, as that particular phone does not get into wi fi range at all. It is the internet provider.

Posted by:

Ralph Bruechert
25 Aug 2016

We will be switching from Credo to Consumer Cellular within days. Consumer charges a flat fee for shared minutes data (all at 4G), but will bump us up to the next level automatically if we exceed the limit. I can change my data and talk plan at any time online as many times as I choose. Oh, and I'll be cutting my bill by over 50%. I don't have the money to hire a Philadelphia lawyer to interpret the various carrier's data plans.

Posted by:

25 Aug 2016

Regardless of what the FCC does, it would seem that the US Postal service would prosecute such deceptive advertising.

In the United States, mail and wire fraud is any fraudulent scheme to intentionally deprive another of property or honest services via mail or wire communication. It has been a federal crime in the United States since 1872.

So any "unlimited" plan which is not truly unlimited, and uses the U.S. Mail for its fraudulent claims, could be prosecuted.

Perhaps all that is needed is for someone to file a formal complaint with the Postal Service.

Posted by:

Dave Fox
25 Aug 2016

Bob, nice article as always. Capitalism would be great, if not for the GREED factor.

Posted by:

26 Aug 2016

It would be interesting to see if either of our presidential candidates will answer the question asked by noseitall. I would agree that this is deceptive advertising, but individually the providers will ignore us. If we can find a way to get this data into the hands of a person (or persons) that could probe on this topic, perhaps it could/would change.

Posted by:

26 Aug 2016

One question: how on the earth my ISP may know if I'm tethering, if I use a VPN? I say that, because you can perfectly run a VPN from your mobile, just for privacy or whatever is your reason. In that way, your ISP will hardly know your are using your mobile plan on a PC (or in your mobile). Is that right?... I totally hate the new "unlimited" plans. In the new era of 4G connections, we should be talking about 10GB per $10, not 1GB per $10. This makes no sense. That's why I prefer to use a WiFi connection in my mobile, whatever is possible. Someone said 'Capitalism' as term for this, but I would say "Fair" should be the word here. You want my money, it's OK, but you should give me a good data plan. Because the new use for "unlimited" is NOT fair.

Posted by:

26 Aug 2016

Your article is the first place I have seen the limitation on rollover of unused data on Verizon. Their reps have just told me unused data rolls over without mentioning the 'use it or lose it within the next month/billing cycle'. Thanks. Makes me wonder whether it's better to cut down the data plan after seeing how much data I typically use in a billing cycle. Obviously they don't want someone piling up unused data forever, but really--only one billing cycle!

Posted by:

29 Aug 2016

I see that you're only reviewing the larger carriers and not including the WiFi+Cell networks like Republic Wireless, where most of the heavy lifting is done via networked mobile devices, rather than cell signal.

Posted by:

Anne De
13 Sep 2016

Lucky me, I got grandfathered in to Verizon's unlimited data. I pay dearly for it, and must be constantly vigilant as Verizon tries to 'sneak' me out of it. buyer, beware!

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